Observe, enlighten and decipher the evolution
of consumption patterns in France and abroad

Section 3 - The expansion of the low-cost market

A future secured…

5 minutes of reading

While the low-cost model was immediately able to win over the least wealthy consumers, it took a while to be accepted by a wider clientele. There were also variations from sector to sector. It is undeniable that the concept’s adoption by the airline industry, among others, has done a great deal to accelerate the trend. But as is often the case when we talk about growth and success, one might wonder if a ceiling has been attained – regardless of whether or not it is “glass” – or even if the model is losing ground. However, the low-cost approach is clearly not struggling yet, although it will need to remain true to itself if that is to continue.

A future secured…

The low-cost philosophy is now firmly established in the European consumer landscape. As noted earlier, the model successfully appeals to many outside what might be considered its natural target group, namely low-income households, although this appeal remains moderate and the concept arouses little passion.

Consumption is rising

The low-cost market appears to be able to rely on the trust of consumers for its continued growth. Over the last year, almost 4 out of 10 Europeans have increased their consumption of low-cost products. Only 16% have reduced it over the same period (Fig. 28). The price advantages of low-cost products have a lot to do with this, especially in the current inflationary climate.

Fig. 28

More low-cost consumption in the future

Many people have said yes to more low-cost purchases in recent times, and just over 4 out of 10 Europeans will also say yes in the near future. Just as many say they will consume the same amount. One country, Portugal, stands apart for its keenness to ramp up its low-cost purchases, with 6 out of 10 Portuguese respondents expressing this intention.

There are no significant differences between the survey’s 14 remaining nations, with each country posting scores close to the overall average. With only 37% of consumers thinking of increasing their low-cost consumption, France posts the lowest figure, just ahead of Bulgaria and Belgium (39% and 40%) (Fig. 29).

Fig. 29

Continued growth in most sectors

If European consumers are to be believed, further growth is set to take place in the majority of sectors. Two of the industries that best represent the low-cost concept, namely food and clothing, enjoy the strongest growth prospects (54% and 52%). The third sector that typifies the concept, air travel, scores slightly lower, but remains in line with the overall average (44%). This could be a sign that Europeans believe the sector has matured, but also that the current economic and political climate is less conducive to travel.

Other sectors, which up until now had not been particularly closely associated with the low-cost model, are now fuelling the expectations of Europeans, who see new technologies, mobile telephony, energy and household appliances heading more resolutely down this path over the coming years. This is much less true for banking and housing, the two areas perceived as having the weakest growth prospects (Fig. 30).

Fig. 30

Food and clothes are the most popular items

The types of low-cost product most commonly consumed by Europeans confirm the degree to which this model has become a part of their daily lives. Food and clothing are the two biggest winners in the growth of low-cost consumption. 41% and 34% of recipients, respectively, state that they have increased the number of purchases they make in these two categories. As regards the other types of product examined, there is something of a status quo, with more than half of Europeans saying that they engage in neither more nor less low-cost consumption than in the past. In the food sector, the proportion of individuals who have increased their low-cost consumption is particularly striking in the United Kingdom, Portugal, Austria and Germany, where the figure reaches or approaches the 50% mark. When it comes to clothing, Portugal and Austria top the ranking, along with Spain and Italy, with scores of around 40% (Fig. 31).

Fig. 31

Low-cost food, an unstoppable force

In the food sector, the rising market share of hard-discount and soft-discount chains supports the views expressed by Europeans via this Observatoire Cetelem de la Consommation survey. Between 2014 and 2022, this market share grew by 5 points, from 21% to 26% (Fig. 32).

Fig. 32 / Context

The eight-fold growth of low-cost air travel over the last 20 years has been by far the most impressive of all the sectors examined.

Low-cost flights: a blistering take off

The growth of low-cost air travel has undoubtedly been the most remarkable of all the sectors examined. In 2001, low-cost airlines accounted for just 5% of the overall market. Today, they are on their way to securing the lion’s share of business in the sector, with the current figure totalling 45% (Fig. 33).

Fig. 33 / Context

Sub-section 7
Low cost for all, but for differing reasons
Armed with these advantages, and far from being merely a source of occasional consumerist opportunities, low-cost consumption has become a natural day-to-day habit for Europeans. Indeed, 54% of t
Sub-section 9
… By staying faithful to its cut-price DNA
As we have seen, the low-cost model is an innovative consumer concept geared towards significantly lowering prices in order to gain market share. Historically, this has been a fundamental aspect